Template-type: ReDIF-Paper 1.0
Author-Name: Brunella Bruno
Author-Name: Immacolata Marino
Title: Bad loans and resource allocation in crisis years: Evidence from European banks
Abstract: The aim of this study is to explore the relation between loan portfolio quality and lending in European banks over 2005-2014. We focus on lending behavior of banks from distressed countries since the Euro sovereign debt crisis. Our results confirm the existence of a negative nexus between poor loan quality and lending, since a higher NPL ratio explains a reduced loan growth and a lower allocation to loans at the advantage of government debt (as a percentage of total assets). Such an impact on lending and reallocation effect are strong and consistent across specifications and over and above other factors that may affect credit supply. 
Classification-JEL: G20, G21, G01
Keywords: bad loans, NPLs, non-performing loans, bank lending, crisis
Length: 29 pages 
Number: 1752
Creation-Date: 2017
File-URL: https://repec.unibocconi.it/baffic/baf/papers/cbafwp1752.pdf
File-Format: application/pdf
File-Size: 705
Handle: RePEc:baf:cbafwp:cbafwp1752